Bumpy road for Malawi’s economy in 2015, economists predict

Economists in Malawi say the country is likely to continue facing financial challenges in 2015 unless the government can regain the confidence of donors, who are still withholding 40 percent of budgetary support due to the corruption scandal known as Cashgate.

Kambala: 2015 maybe worse

Kambala: 2015 maybe worse

More than K20 billion ($30 million) were looted from government coffers in the scandal, and several people, including government officials, were arrested.

The withholding of donor aid has forced Malawi’s government to pass what is known as the Zero Aid national budget for the 2014-2015 fiscal year.

Analysts, such as Abel Mwanyungwe, an economics lecturer at the Polytechnic College of the University of Malawi, say the drop in spending has hurt the economy.

“This has been a bumpy year as we are coming from the Cashgate effects that have quite a major dent on the economy’s performance. We have seen that in most cases the very delicate and crucial departments and service providers have been affected, in the sense that we don’t have enough drugs in the hospitals. In schools, in terms of teachers’ payments is not in time,” said Mwanyungwe.

Mwanyungwe also links Cashgate to the recent depreciation of Malawi’s currency, the kwacha, which has resulted in strikes by various government workers demanding higher pay.

For example, support staff for the judiciary have been on strike for six weeks, seeking a 45 percent pay increase which the government says it cannot afford because it has no money.

Workers at Malawi’s Anti-Corruption Bureau went on strike demanding a 70 percent pay raise until the government threatened to forfeit their December salaries if they did not return.

Mwanyungwe said the government can only avoid further strikes in 2015 if it makes efforts to restore donor confidence in the management of its public finances.

“My fear is that if we don’t have this donor confidence and donor support coming back to the economy, we may force the government to go into serious local borrowing that would lead to serious repercussions in terms of inflation, in terms of interest rates and this may have a sort of catch-catch lose situation,” said Mwanyungwe.

The donors are, among other things, demanding that the government prosecute all those involved in the scandal and strengthen its financial management system.

Newton Kambala, the president of the Malawi Confederation of Chambers of Commerce and Industry, said according to a quote in The Daily Times  the scandal rendered 2014 as “a very bad year for the business sector, because of huge debts that the government owes the private sector.”

He warned that if the situation persists, “2015 will be worse.”

In his state of the nation address last Saturday, Malawi president Peter Mutharika said his government is doing everything possible to address the problems caused by the Cashgate scandal.

“My government has strengthened the financial system to make sure that Cashgate never occurs again in Malawi.  We have resourced fairly well the law enforcement institutions, including the Anti-Corruption Bureau, so that they do a thorough independent job, prosecute all suspects, and recover the stolen resources where possible,” said Mutharika.

Mutharika also said his government is implementing newly-adopted fiscal reforms that seek to grow the country’s economy by 5.5 percent in 2014, up from an estimated 5.0 percent in 2013.

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51 thoughts on “Bumpy road for Malawi’s economy in 2015, economists predict”

  1. I congratulate Nyasa Times for consistently furnishing citizens who are outside Malawi with news and stories affecting our beloved country.

  2. Jacob Phiri says:

    Malawi’s economy can not grow unless the executives adapt kamuzuism and its ideologies.

  3. pina says:

    Kadziko ka malawi ndi kakang’no koti kangatukuke within two years ngati anthu ongwila ntchito boma atamagwilitsa ntchito ndalama mwachilungamo.
    Stop stealing! !!!
    Madonor akuthandizani mpaka liti.
    siyani kuba!!!
    Anthandizeni anthu a malawi.

  4. Abiti Jafali says:

    Che Peter, u president obera umazunzatu.

  5. George Samu says:

    We can do without donors if corruption is eleminated. At MRA half goes to the officers and Half to the Government, traffic police 80% to the officers and 20 to police, road traffic 70% goes to the officers, for your information the cashiers just receive money and produce some fake receipts. Investigate this, in all government departments money is shared the moment they’re funded, please investigate the 20/80 syndicate operated through malswitch cards, we are loosing more money through this syndicate, procurement processes are all a mess, ODPP is corrupted only mwenyezi get contracts and unflate prices, road traffic will soon have movesa issuing licences at 15000 and somebody will be receiving something from back door like the way it is with number plates and the EFD machines for MRA, the so called well wishers are not in any way well wishers but our enemies,

  6. Vavlov says:

    I find it depressing to see a Malawian economist believing the country can develop through donor funding. For how long should Malawi depend on donor support? The least I would expect from an economist is proposals on how Malawi can attain financial self sustainability and not promoting donor dependency. Shame on you Mr economists, you are shallow, and not helpful to the country. .

  7. mlomwe wa nzeru says:

    if we work hands and hands we govt we can win

  8. william says:

    Though u said its written in the bible pls let us put aside the bible otherwise u would make those clever politicians to steal in the name of the last days

  9. Ineyo says:

    Add more predictions. You have just scratched an elephant on the back. Kuli mavuto a Yobu in 2015

  10. chakwanuleka says:

    Nothing will change. More strikes and no donor support. Which donor can give money to a party of thieves. Let them investigate the 92 billion or simply put letthem investigate their own pockets before the donors come forth.

  11. Wamandasi says:

    This a sore loser Kongelesi loyalist and western ant zdb agent.

  12. Wamandasi says:

    These are opinions of western anti zdb. A saddist and advocate of needless demonstrations
    .

  13. Kasichi says:

    Malawian government doesnt have money to pay de civil servants but it got money available for peter mutharika and his wife to steal?de government got de money for peter to bribe de journalists?

  14. Kasichi says:

    Wht do u think dpp as aruling party cn offer malawians?,asnake is asnake and we all knw wht dpp is capable of interms of stealing,manipulating.dpp ws in government and they stole more than k90billion and joyce banda dd de same thing and now dpp only 2months in government they managed to steal some money,peter stole de money and bribed de journalists to shut their mouth and shameless wife of his stole de money dat meant for de sick people wth hiv and aids.those people who helped dpp to rig election will rot in hell,how can u sell 13millions souls to dpp for de small change?

  15. chipatso says:

    Iwe Kenneth ngwali iwedi ndi ngwalidi ya mthengo yosochera.ukutiuza kuti mmalemba mwakomo ana ntchulamo Malawi yekha basi.iwe farao eti.

  16. Why do u always forget to write K92billion kwacha in your stories?

  17. Palibenso munthu anganene kuti adzakonza dziko ya Malawi choti tidziwe ndichati tili mu masiku otsiliza.ndipo zonse zikuchitikazi zinalembedwa mu bukhu la malembo oyera tiyeni titsamile kwa yesu basi

  18. Mauya says:

    Ofcourse it will be bumpy as it already is right now and that the cash/Nac gates,donor withdrawal and the Malawi economy whose economic recovery plans may not be that swift to normalise
    However commitment to national action plan at all levels is all Malawi needs to turn the economy round.

  19. LimbikaGP says:

    This country is a joke. Why not go back and make all former presidents account for all the monies that went missing in their watch.Are we that foolish?

  20. Babylon System = Vampire says:

    Abel Manyungwe, Newton Kambala & co, plse suggest detailed workable solutions for the govt either to restore donor confidence or continue with zero aid/deficit budget.Govt leadership since Malawi adopted multiparty politics has been myopic, clueless,corrupt,nepotistic,fraudulent and satanic.In 2019 we should go by federalism.If not we outsource presidency from the ‘west’ o asia.

  21. Mmihavani says:

    Chatty Man, you are typical of poor and foolish Malawian. So with all your problems you look up at Britain and Germany to feed you? With that spirit you will be poor forever. As for me and my family we have decided to work hard and plan our future and its working. We are emulating the refugees and foreigners who are making it big in Malawi while its citizens are looking up at politicians and the west to help them. What a Malawian knows is to bear as many children as possible and leave them for donors and government. No wonder what Malawi does well is weddings and bridal showers every week all over the country, pregnant women flocking for free medical care in district hospitals.

  22. Kadakwiza says:

    Kodi chuma cha Malawi chidzayenda bwino liti? Nthawi ya UDF sizimayenda olo pang’ono, kwabwera economic engineer ati ndani uja, ati Bingu, chuma nde chinapita pansi. Kwa bwera ati Joyce Banda, anayesetsa pang’ono. Pano pali mkulu uyu ati ndani paja, Pitala. Pano chuma chalowa pansi. Yankho kuti chuma chiyende bwino pofunika kufufuza zinthu izi, K92bilion yimene yinasowa nthawi ya economic engineer. Komanso ndalama zomangila ndata, zinachokera kuti? A Malawi bwanji ngati mwagona. Popanda ma donors palibe chimene chingayende. Zero aid budget siyigwira, Malawi ndi dziko losauka. Pafunika mtsogoleri oyitanitsa ma donors. Ma donors akakhalapo ma kampanenso amabwera. Dziko limayenda bwino. A Malawi thamangitsani munthu uyu ati Pitala uyu kapena mudikira 5 years. Ndi momwemo poti a Malawi ndi wombwambwana

  23. chatty man says:

    Until MK92 is audited! German and Britain are jst laughing at you!

  24. Baba says:

    What the hell this indians r caught red handed like karimof Lido arrest him mk50 billion is not a joke

  25. LEGALWISE says:

    Stupid persmist always predict doom. If JB and her cronies to steal MK23b and we have been able to survive what can not make us survive this time if we can use our resources prudently. Let us just forget the stupid donors and leave within our means. Isolation will help us to think outside our box instead of resigning to fate like this persimist. we are like an orphaned family and we should accept that our parents died and life has to continue instead of always crying when we know they will not com

  26. Namalila says:

    I feel its never late, we can still join hands and comes out in this bond of poverty and general economic downturn.
    The political will should take the lead and let’s not waste time crying for the spilt milk other than standing up and start working on the alternatives.

  27. Fathara says:

    2015 CHIKHALA CHAKA CHOPAMBANA KWAMBILI PAMENE TITAKHALE NDIZOKOLOLA ZAMBILI. KOMANSO CHUMA CHA ZIKO CHIYENDA BWINO KWAMBILI MUCHAKACHI. SIKUTI NDIKUTI NDIYE KUTI SIKUKHALA ZOVUTA ZINA NDI ZINA IYAYI ZIKHALAPO, KOMA A MALAWI MUSADANDAULE TIDUSA NDIPO ZINTHU ZIKHALA BWINO KWAMBILI. MULUNGU AKUNDIWONESA MALAWI WOPAMBANA, MALAWI AMENE ATAKHALAE OZIYIMILA PAYEKHA. MALAWI AMENE ATAKHALE NDI MIGODI YOCHULUKA, CHAKUDYA CHOCHULUKA. KOMANSO NDALAMA YATHU YA KWACHA IKHALA IKUCHITA BWINO KUSOGOLOKU. MALAWI AMENE NDALE ZITASITHE KAPANGIDWE KAKE. MALAWI AMENE ATAKHALE NDI MISEWU YOPAMBANA, NYUMBA ZABWINO. KOMANSO MAPHUZILO APITA PAMWAMBA, NDIPO APITILILA KUKHALA MALAWI WA BATA NDI NTENDELE. KOMANO TIKUYENELA KUKHALA MUMA PEPHELO KWAMBILI KU PEPHELELA ZIKO LATHU NDI ASOGOLELI ATHU. KOMANSO TIKHALE A MALAWI OTHESA VUTO, OSAKHALA OBWELESA MAVUTO. TISAKHALE A MALAWI ACHIKAYIKO, KOMA TIKHALE A MALAWI ACHIKHULUPILILO KUTI NDIZOTHEKA MWA YESU MULUNGU WATHU WAMOYO ZIKOMO MULUNGU ATATE ATHU AKUMWAMBA OZIWA KUDALISA ADALISE MALAWI ZIKOMO.

  28. DPP GVT must step down. Instead of promoting fiscak disciplene APM and his wife including the cabinet are in the fore front promoting theft and corruption. How you forgotten NACGate and Palmoiling of Journalists? AS long as APM and DPP are in power donors cannot come in. In addition there are still a lot more top Civil Servants who were involved in the cash gate and yet they are still working. We are aware that these are thieves and nobody has come out to let them be removed from their positions. An example in point is Tchuka of the Reserve Bank. Theft happen under his watch and no action has been taken against him. What about the 92 billion stolen by the current DPP guys during the time of Bingu. APM used the same cash for campaigning. Which donoor can come back as long as APM and DPP are in power? Malawians let us stand up and use force to remove from power these thieves. Pple power does not fail.

  29. A MPINGO says:

    MAY GOD SHOWER HIS MERCIES ON MALAWI ( PRAYERS)

  30. H Kamdidi says:

    Kkkkkkkkkkkkkk! Is this a prediction? And is this news-worth? Who doesn’t know this fact? This is nothing new. Actually the bumpy ride started as soon as APM took over government!

    What I expect from an Economist is not predicting a bumpy ride but rather coming up with workable solutions which the government should apply.

  31. Life says:

    Malawians are literally headless people. If we were a democracy, government for the people and by the people, we should have demanded that the current group of people so called “our leaders” resign and we choose new group. There is no way we can gain donor confidence when the people ruling are so much part of the cashgate. Joice Banda and Peter Mutharika know each other too well. Cashgate was a brain child of Bingu Mutharika and was executed through Mulli, just like Lutepo was. That is why Peter mutharika cannot do what is needed to resolve this issue, thus bring to book Joice Banda. The donors know this. It is not about the FIMS whatever system, it is the stupid Malawians who did not protest when Peter Mutharika rigged the election. Stupid Malawians, you will pay the price. Simunati, mulila, mumina, mukukuta mano.

  32. dadaboma says:

    The main problem of 2014 is not cashgate; it is lack of proper political leadership. In APM there is no proper leadership. If JB continued ruling this country, donors would already have given Malawi their money. Why? It is JB who revealed the existence of cashgate, it is JB who instituted forensic auditing of plundered govt resources, it is JB who begun arresting and prosecuting those who stole govt money and started recovering the same, and it is JB who started sealing leaking holes through which govt money was being stolen. But the elections brought in APM instead, courtesy of the foolish Malawians. The donors emphasized their readiness to support Malawi only if the leaking bucket was sealed, cashgaters arrested and prosecuted, stolen resources recovered, and the 92 bn kwacha stolen from 2005 to 2012 also audited. APM said he didn’t have the money to audit the 92 bn MK theft. The donors, particularly Germany gave APM lots of money to do the auditing several months ago. APM has still not done the auditing and is not saying anything about the German money meant for the activity. Why is APM reluctant to do the auditing? Because APM is one of the thieves that started cashgate during his brother’s DPP reign when the 92 bn MK was stolen. So it is not cashgate that is to blame but leadership. If we can bring back JB to rule Malawi now, all this so-called “bumpy” road would be smoothened in a matter of weeks and Malawi would be restored to glory once more. But as long as APM is president, Malawi is doomed and finished.

  33. kambala its kak man he don’t think proper ant his country watchout his advise

  34. Muchizi John says:

    In its current form IFMIS is an extremely vulnerable system that hardly ensure government resources proper management. It only requires three corrupt minds to defraud government money. One who prepares a voucher, another who does first approval and another who does final approval in the system. The deal is done. It’s that simple. Look as I write this many civil servants claim more than days in a month in subsistence allowances. People entrusted with the responsibility to improve IFMIS are not the best team…….they are incompetent like most civil servants in important positions that seek to reform this bureaucratic institution. I personally doubt that this government administration presided over by achimwene APM has any capacity to improve financial management in civil service. At times I think it’s deliberate so the political elite can continue to ransack our national fiscus.

    1. Dingase says:

      No 15, U r very right. A lot of money is still being syphoned in terms of fake allowances and salary arrears mostly in the ministry of Education and health. The economy of Malawi under APM is really heading to the graveyard.

  35. Weniweni Balakasa says:

    The coming in of community technical skill centres have brought in some confusions and misunderstandings in some areas such as in Nkhatabay at Tukombo. Community is divided on the way the community hall has been turned to be the technical sch.

  36. APM should also probe K92 billion. He has not commitment to do that and there is nothing strange becoz the pple who are prosecuted are the result of JBS zero tolerance

  37. kwabaniso says:

    Mr Kambala Newton, you are an engineer not an economist. So dont confuse people. Malawi is your country and you re not in asylum, If you have hidden eyes to see the future as bad, please offer bailing out options. Otherwise we all know you being mChewa that you are behind Chakwera and Malawi Congress Party all bent on developing your country.

    1. chekha says:

      U seem to see anything thru political lens. Mr Kambala is saying the truth. Just do something if u want to change the status quo!

  38. chipatso says:

    That’s what we wanted to be led by a so-called educated pork.

  39. Issa Kabudula says:

    Mr. Kambale as a lecture of economics, what I can advice this teach is not to warn but to bring means of economic recover plan and we need to be sharp minded enough of playing cheap politics. I have seen and heared many political commentators playing a blame game on the current government instead of advising, coz problems are ours, blames wil not bring money on the table brothers and sisters, this including our newspapers who must play the role of righting our wrongs, we Malawians are at wrong due to the fact that, we dont back each, we feel happy if one person is failing or larging behind, when are we growing up?

  40. Indeed 2015 wanna be bumpy if we wont finish cash gate issue. Tamuyitanani JB adzayankhe milandu kuno. Why is the government failing to call her? Mayiyu has alot to answer on this issue coz these young dudes cant keep on mention her name as a big cash gate beneficially. Had it been Kamanya was alive, you could have listened more. Mbala zimenezi zimangidwe basi to convience donors to start supporting us. And i beg the President to jack up for malawi economy. Big thinking big deal!

  41. Jimmy says:

    A Kambala jst worrying doesnt solve a problem at all you must learn to be contributive to solve a problem in such a way you make it become simple.Jst to say 2015 will be worse doesnt make any sense bcz your in the same sinking ship,and it worries deeply an ordinally person who doesnt know anything,especially the causes of this.

  42. Alfred Munduwabo says:

    Please , audit the MK92bn as well just to bring the confidence to all the donors

  43. Jimmy says:

    Dont take donors for granted,bcz they are very clever ppl.They keep on watching your tactics of stealing money,but when it comes to their final decision it affects everyone.See what is happening now & that zero aid budget will have negative impact soon.You will see things will be bad in Malawi,i suggest this stupid administration better declare a state of emergency before things are completely out of hand so that other donors may sympathise with us to resume aid as they wait for cashgate outcome.

  44. Jimmy says:

    The country is directionless in few months you will see Malawi coming to a stand still.What fiscal reforms are you talking about Peter,it has been high time talking about recovery but nothing happens.Only donor confidence is needed you cant do anything own your own never bcz you dnt have the capacity to do that.That is why your now thinking of sealing the judiciary which is imposible at all.Malawi has now become a Banana state where robbers are freely running their operations.We never know when will those fiscal reforms start working.

  45. Shad Matemba says:

    Gud Idear Mr Kambala Thakx

  46. Nawaoo says:

    I totally understand and agree with the donors withholding their financial aid to Malawi until all cashgaters have been prosecuted infact they should release it until akuba onse amangidwa n also it’s proven that the financial management system is indeed strengthen not relying only on the words of APM, paja he has proven to be thee biggest liar!

  47. Why the Muthalika led government is wasting our time? They r taking our gesture for granted.

  48. Ayaya says:

    rubish. u cant be optimistic?

    1. Mzika says:

      @ yaya

      With the current state of affairs there is nothing to inspire optimism you fool. We cant pretend we are a failed state presided over by a failed and inept President President

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